Donald Trump came late for and left early from the Group of Seven summit meeting in Quebec City, Canada. He arrived ready for a fight. He had already started a trade war against Canada and Europe. It was inevitable that that war—over steel to begin with—would percolate to the G7 meeting.

Trump’s tantrum in Canada was not wholly unwarranted. The U.S. for years has asked the European powers to contribute more towards the North Atlantic Treaty Organisation (NATO), their military alliance. NATO has 28 member states, but the U.S. pays 22 per cent of NATO’s budget. The standard set by the NATO states is for them to spend 2 per cent of their Gross Domestic Product (GDP) on the military. As of now, only five states do so (the U.S., Greece, the United Kingdom, Estonia and Poland). The other large states (France, Germany, Italy and Canada) spend half the agreed standard. No one denies that these other countries are simply not paying their share of NATO expenses. Canada, for example, delegates just 1.02 per cent of its GDP towards its military.

Trump came to Canada determined to link the question of military spending to trade negotiations. Until now, the U.S. has been the anchor of Western military expansion across the globe. The U.S. spends more on its military than any other country in the world. It is relied upon by the Western powers when they want to exert themselves, whether in the South China Sea or in the Caribbean Sea. It is the U.S. that effectively dominates the NATO mission in Afghanistan and it was the U.S. that ran the bulk of the bombing runs against Libya.

Trump said that it was the U.S. that paid “close to the entire cost of NATO” or at least close to the entire cost of military exertions by the West. Trump is not the first to have made this judgment. In February 2008, U.S. President George W. Bush’s Secretary of Defence, Robert Gates spoke of NATO as a “two-tiered alliance”. In NATO, Gates said then, “you have some allies willing to fight and die” and “you have others who are not”. In the NATO war on Yugoslavia (1999), 83 per cent of the bombs were dropped by U.S. warplanes. In Afghanistan, from 2001 onwards, 75 per cent of the troops have been American.

Before she left for Canada, German Chancellor Angela Merkel pledged to raise Germany’s military spending from 1.19 per cent of the GDP to 1.5 per cent of the GDP. This was an admission that Germany had indeed been a free-rider on the U.S. Even with this rise, German military spending would be below the 2 per cent target that was set by NATO member states at the 2002 Prague summit. It is far below the U.S. rate of spending, at 3.61 per cent of the GDP. At a recent NATO summit, Trump’s Secretary of State Mike Pompeo targeted Germany for its low spending. Germany’s new Foreign Minister, Heiko Maas, offered a strange defence: Maas argued that Germany had “an extraordinary presence in terms of its perception of its international responsibility”, namely, it spends its money on humanitarian aid. This did not appease the visible anger of Pompeo and the frustration in the White House.

But NATO is an alliance with a problem. The countries defeated in the Second World War—Germany and Japan—have been wary of rearming to a greater level. Germany has held back its military spending for economic reasons and because of anxiety in France. The U.S. took over the defence of Europe so as to circumvent any tension between these key partners. Japan is not a part of NATO, but it is a “major non-NATO ally”, a concept created by NATO to urge close cooperation on military matters. Japan’s Constitution forbids it from building up an offensive military force. Pressure on Japan to increase its spending would require it to rework its Constitution. This is a matter of great political concern not only in Japan but also in both Koreas and in China.

Trump has upended the delicate balance by demanding, rather than urging, an increase in military spending from U.S. allies. In July, Trump had planned to review the spending by European allies at a NATO summit. The drama in Canada is a preview of that meeting. Trump and his team said that at the 2014 NATO summit in Wales, the countries had formally agreed to move their defence spending to 2 per cent of the GDP. Now, after all these years and after a quarter century of military cuts, it is unlikely that the European allies will be near the benchmark. In fact, Spain’s previous conservative government said that it would neither meet the target nor even attempt it. This attitude is what rankles with the U.S.

Trade tariffs

Before the G7 summit in Canada, Trump had placed tariffs on goods produced in Canada, Mexico, Europe and China. Most of the countries of the G7 would have faced some measure of economic difficulty with these tariffs. The economic logic of these tariffs is not as important as their political effect. Trump made a stand. He argued that the policies of U.S. allies hurt U.S. workers. It was on this basis that the U.S. would use its vast consumer power to get a better deal for its workers.

The G7 was set up in 1975 in the French town of Rambouillet. What brought together six major industrial countries was the oil crisis and the emergence of the post-colonial states. In 1973, these states voted as a bloc in the U.N. General Assembly for a New International Economic Order (NIEO). They argued that the trade rules and the finance rules, set largely by the West, had suffocated their attempt to break out of the colonial economic order that emerged out of the Second World War. The NIEO proposed an alternative foundation for economic activity inside and across boundaries. Those post-colonial states with oil reserves used their combined power that same year in a political strike that lifted oil prices. This strike came as a consequence of the Western backing of Israel’s war against the Palestinians. The combination of NIEO and the oil strike rattled the West. Its main powers—France, Italy, Japan, the U.K., the U.S., and West Germany—met to collude against the post-colonial states. That was the reason for the formation of the G6, which, with the addition of Italy, became the G7.

At the inaugural meeting of this alliance, the West German Chancellor said to his colleagues that he was willing to destroy the German textile industry if this meant that the world economic order would be strengthened on behalf of Western-based capitalists in general. The G7 meetings after 1975 operated as a secret platform where the leaders of the West could gather and set policy for the rest of the world. When they were able to collude with a reasonable amount of certainty that their interests would be well served, the G7 made sense for them. For instance, it was in the G7 that the main discussions took place towards setting the agenda for the World Trade Organisation (created in 1994).

Now, with the global economic crisis catapulting beyond its first decade, the utility of the G7 is not so clear even to its member states. Haemorrhaging expectations inside the U.S. pushed Trump to stake his political fortune on economic nationalism rather than G7 globalisation. It is this economic nationalism that fractures the world view of the G7 leaders. No longer will they be able to hold their cosy get-togethers where they decide the fate of humanity. The tariff war set in motion is the first salvo against the bow of G7 unity. The war of words that followed the Canada meeting suggests that it will be hard to hold together the alliance. It is not enough to blame Trump for this, although he has, as the historian Anne Applebaum put it, been the “accelerant” for the demise of this Western-led post-1991 world order.

At the G7 meeting, Trump suggested that Russia be reinvited to join the alliance. After the fall of the Union of Soviet Socialist Republics (USSR), Russia was invited to join the G7 (it was renamed the G8) in 1997. It was ejected in 2014, when Russia exerted itself in Ukraine. It is unlikely that Moscow would like to come back to the G7. While that meeting in Canada was falling apart, the Russians and the Chinese gathered with their Asian allies in the Shanghai Cooperation Organisation (SCO) held in Qingdao (China). This meeting had its own tensions. India, for instance, refused to endorse the Chinese-led Belt and Road Initiative. Nonetheless, it was apparent that, at least in Asia, a different kind of globalisation had arrived. It had muscled its way around the G7 and will watch from afar as Canada’s Justin Trudeau and the U.S.’ Donald Trump insult each other from press conference podiums.